By Michael Reddell 20/02/2017


A few months ago, I wrote a post on the role of “experts”, responding to a British journalist and author’s lament for the apparent willlingness of voters/societies to downplay, or even dismiss, the role of experts when it comes to making significant public policy decisions.

In his column in yesterday’s Sunday Star-Times, local economist Shamubeel Eaqub returns to the theme.

Experts are increasingly side-lined. Political leaders openly ridicule them and the public emphatically ignore their advice when voting.

Our public servants at Treasury must have identified – “yes, someone feels our pain” – even unusually taking to Twitter over the weekend to draw attention to Eaqub’s column.

I’m not sure when this golden age was, when “experts” apparently held sway with voters. I can’t think of a time in New Zealand, or British, history and although I know the modern electoral history of other Anglo countries less well (and those of continential European countries hardly at all) I struggle to think of examples in those countries either.

One can’t help thinking that Eaqub’s complaint –  and that of various other writers abroad who run similar lines –  is mostly that the voters, and politicians aren’t endorsing the particular expert opinion favoured by Mr Eaqub.  I can understand that: I’d prefer my “expert” opinions on various matters were taken up and embraced by the voters and politicians.   But if they aren’t, it tells one nothing obvious about the failure of the system.

Housing, for example, is one of those topics on which both Eaqub and I have written on and thought about –  even if perhaps neither of us would count as high-level experts.  But we reach quite different conclusions on what bits of policy should be tweaked to solve the problem.  If I understand him correctly, he would emphasise tax reform, state-house building and no doubt some freeing up of urban density restrictions.  I’d emphasise freeing up land use restrictions (while protecting the rights of individual residents/owners to act collectively to protect their interests), and a marked cut in the target level of non-citizen immigration.  The Productivity Commission, a body with some claims to expertise in the area, goes as far as to favour allowing government agencies to seize private property, as one means of assisting. Ongoing research and analysis can, and should, shed some light on the implications of each of these options.  In some cases, such research might even suggest that a particular option was unlikely to achieve the desired end, but the really hard choices aren’t likely to be resolved in battles of the experts.  They are often more about the sort of society/polity different groups want – including the respective roles/powers of the collective and the individual.  Perhaps theologians and philosophers might be some help there.  Economists aren’t likely to offer much.

Bringing up Brexit

Eaqub falls back quite quickly on the Brexit example.

In the UK, expert consensus was that Brexit would be bad for the economy. They signed open letters and argued their case in media. Well-known experts like Bank of England governor Mark Carney, warned of the costs of Brexit.

Less of a servant of government, rather more of a prince – but even he could not convince the voters.

I’m not sure that the Governor of the Bank of England, a Canadian banker temporarily employed by the British government (and by a Chancellor who was one of the leading figures in the Remain cause), particularly counts as a disinterested expert on the interests of the British people.  But lets grant that most economists, even those close to the specific technical issues, thought that Brexit would come at some economic cost (lower future GDP per capita) to Britons.    Those views weren’t kept secret, and they weren’t only expressed in abstruse language.  And a small majority of British voters nonetheless favoured Brexit.

When the Australian federation was being devised in the 1890s, there was a real possibility that New Zealand could have joined –  after all, at the time, New Zealand was just one among the various British colonies of Australasia.   At the time, the average New Zealander had much more in common with the average citizen of New South Wales or Victoria than, say, the average Briton today has in common with the average Italian or Pole (almost whatever measure of homogenity/heterogeneity one wants to use).    And yet economists at the time could quite easily have pointed to the potential economic costs to New Zealand from staying out of the federation –  including facing external tariffs on exports to Australia rather than being part of the free trade area, and loss of potential economies of scale in central government functions.  Those seem like quite plausible arguments, and yet our ancestors chose to take their own path, and not join the federation.   Perhaps even today we are poorer as a result, but I suspect most New Zealanders don’t regret the choice.  If economists today could, as I’m sure they could, produce model results suggesting that New Zealanders would be perhaps 5 per cent better off by joining Australia, I’d be surprised if that result shifted public opinion much –  not because people despised expert economists, but because other things matter more to them in the choice to be independent were other considerations.

A question of communication

But Eaqub does have an interesting take on the issue, in that he appears to think that much of “the problem” is with how experts –  and especially expert economists –  communicate.

They often focused on very specific issues that could only interest other experts.

Worse, a lot of their writing was in expensive journals, accessed and read mainly by other experts. Academics’ performance is often linked to their volume of publications in expert journals – it’s a self-reinforcing isolation cycle. The writing is often in obtuse and highly technical language, designed to exclude non-experts.

Except for a handful, most academics are invisible in public life.

The absence of academic economists in public life has been filled by bank economists. Their brand of simplistic and high noise commentary on the to-ing and fro-ing of the economy, is the public understanding of economists. Rather than the more complex social and political aspects that relate to economics.

experts = jargon?I have some sympathy, and probably many people do.   Whether it is the PBRF here, or similar mechanisms abroad,  the incentives seem to be to publish as many papers in possible, cited as often as possible, in technical journals –  however small the potential advance of knowledge might be.    Those reforms were well-motivated –  most reforms are – and probably did deal effectively with people like one Victoria University academic I recall from student days, who wasn’t much of a teacher and didn’t seem to have published anything in 20 years.  But they have had undesirable consequences.  I recall being on the organising committee a few years ago for a well-resourced conference The Treasury and the Reserve Bank were promoting, looking for authoritative insights on New Zealand’s long-term economic underperformance and threats to its macroeconomic stability.  We were commissioning papers, and offering a reasonable amount of money to potential authors.  We ended up with some pretty good foreign authors, but didn’t get a single substantive submission/proposal from a New Zealand based academic –  apparently, in part because for papers on some of these intractable issues, we couldn’t guarantee subsequent journal publication.

I think it is a shame that we don’t, at present, have much contribution to New Zealand public debate from academic economists –  although I’m less sure it is true of other disciplines (for good or ill, think of public health, climate change or child poverty).   There have been times in the past when it was different, but it isn’t clear that public policy –  or the interests of voters in deferring to “experts”  –  was much better/different then than now.

One of Eaqub’s other concerns is what “experts don’t take account of”

Experts’ increasing irrelevance has much to do with their tendency towards insularism. Their awful communication – they talk to each other in anachronistic and technical language – excludes a large majority of society.

Their theoretical models exclude obviously real-life things like politics.

In some areas no doubt, but his sweeping dismissal seems far too broad –   and gives no weight to the importance of trying to make issues tractable.  And economists have developed whole literatures around notions of “government failure” and difficulties people (including voters) have in getting those who notionally work for them to pursue the interests of the principal.  Our Reserve Bank Act is just one example of legislation influenced by a recognition that neither officials, politicians, or voters are saints or angels.    We have models like the Open Bank Resolution arrangements explicitly because expert advisers recognised the politicial incentives governments typically face in the midst of crises.

Experts: ‘Citizens’ or ‘hired guns’?

Towards the end of his column, Eaqub argues that

We have to understand that the role of the economist and expert is as a citizen and advocate for our society. Not simply as hired guns to advise political leaders or as technocratic rulers.

But I’m struggling to know what he means, or  at least how realistic his aspiration is.  I’m sure that all the so-called experts have the best interests of their country –  or perhaps the wider world –  at heart.  But they also approach issues with their own predispositions and background, typically have to feed themselves and their families, and have their own career interests to look to.   Who funds “experts” –  and especially in a small country?  Mostly, the public sector.  Who provides fora and venues within which expert voices, talking expertly, are heard?  Mostly the public sector.  Even in a US context –  with a rich hinterland of well-endowed universities and think-tanks –  I’ve read arguments previously about how much easier, and well-rewarded, it is likely to be to be producing research on monetary issues that is well-received at the Federal Reserve (with its huge body of researchers and network of conferences etc) than to step outside that mainstream.  It isn’t impossible to take an alternative view, and produce alternative results, but it results in a skew towards work supporting the interests and priors of powerful state agencies and their managers.  The process becomes self-selecting over time –  those disinclined to produce results supportive of the interests of the incumbents tend over time to go and do something else with their lives.  On policy issues,  (as distinct perhaps from a expert plumber, or expert oncologist) so-called “experts” –  all too often, even then expert on very narrow points –  are not, as a group, some disinterested group that citizens can, or should, rely on for guidance.

In a US context, for example, it is well-recognised that there is a massive imbalance among academics –  less so in economics than many other disciplines –  in favour of Democrats.  I’m not sure if there are comparable data in New Zealand, but it would be surprising if the picture were so very different.  We shouldn’t suppose that people’s political preferences, and the instinctive preferences that lead them one way rather than another, don’t also shape the sorts of issues they research, they questions they ask in framing that research, and even how they interpret and frame their results.

I’m not suggesting anything corrupt or inappropriate at an individual level, simply highlighting some of the ways in which the rise of big government-   often championed by technocrats and related “experts” – can become self-reinforcing over time.  All too often one technical problems begets proposals for yet more technical, intrusive, solutions –  doing so feeding the inclinations of the academic “experts” and the bureaucratic administrators.  If the public ever become suspicious, and unconvinced that the bureaucratic solutions are well- aligned with their own interests, there is little reason why they should be inclined to defer to the preferences of the same “experts” who helped devise what no longer satisfies them. 


Site Meter